- GBP/USD gained traction for the fifth straight day, though a modest USD uptick capped gains.
- Better-than-expected US Q1 GDP print failed to impress the USD bulls or provide any impetus.
- A sustained move beyond the 1.4000 mark is needed to support prospects for a further move up.
The GBP/USD pair held on to its modest intraday gains above mid-1.3900s and move little following the release of US macro data.
The pair built on its recent positive move and gained some follow-through traction for the fifth consecutive session on Thursday. The uptick was exclusively sponsored by the optimism over the gradual reopening of the UK economy, though lacked any follow-through amid a modest US dollar strength.
As investors looked past the Fed’s dovish message on Wednesday, a goodish pickup in the US Treasury bond yields assisted the USD to rebound from the lowest level since February 26. That said, the USD uptick lacked bullish conviction, instead lost some steam during the early North American session.
The USD bulls seemed rather unimpressed from the Advance US GDP report, which showed that the world’s largest economy expanded by 6.4% annualized pace during the first quarter of 2021. This was well above the 4.3% rise recorded in the previous quarter and consensus estimates for a reading of 6.1%.
Given that the Fed has repeatedly reassured to maintain the current accommodative monetary policy stance, the robust data failed to provide any meaningful boost to the USD. The muted market reaction also suggests that the market has already priced in a relatively faster US economic recovery.
That said, the lack of any strong follow-through buying around the GBP/USD pair warrants some caution for aggressive bullish traders. Hence, it will be prudent to wait for a sustained strength beyond the key 1.4000 psychological mark before positioning for any further near-term appreciating move.